Tag Archives: economics

Has Zitto revealed fake news on Tz economic growth?

The Citizen, 2/11/2017

Zitto Kabwe was arrested last week. He must be getting used to this by now, as he’s been held and questioned by the police on several occasions over the past couple of years.

What’s new this time, however, is that along with the by-now commonplace charge of “sedition”, he has been charged under the Statistics Act – the first such charges brought since the Act became law in 2015. Specifically, he and his party, ACT Wazalendo, published their own analysis of official economic data from the Bank of Tanzania (BoT), suggesting that the official GDP growth figures had been manipulated, and that actual growth was 0.1% rather than the BoT figure of 5.7%. And somebody decided that these are sufficient grounds to have him arrested.

I am not an economist and cannot either confirm or reject Zitto’s claim. I hope others will try to do so. But I can put forward some related data on the state of Tanzania’s economy that might help shed some light on the situation.

Let’s start with Zitto’s figures, however. His argument is essentially that up to now, GDP growth in Tanzania has stuck fairly close to the rate calculated using inflation and money supply figures. The most recent data, however, show a marked diversion, led by a sharp drop in money supply. In other words, the two blue lines on this graph stayed fairly close until this year. So something must be wrong with the latest figures, in his view.

Whether or not this argument holds water, however, we can also examine other data that can tell us something about the state of the economy. I have four more charts for you, starting with the money supply (the amount of money held in Tanzania, either in cash or in bank accounts):

It’s up and down a bit, but it shows one thing pretty clear: that growth in money supply in Tanzania has dropped considerably since early 2016. Before that, the amount of money circulating in Tanzania had been growing at around 15% each year. But that has now dropped to around 5% this year.

Next up, let’s look at another important proxy for a nation’s economic health: imports and exports. If the economy is doing well, demand for imported goods and services and production of exports should be on the increase.

When it comes to exports, the figures are up and down, showing no clear trend. But imports of goods and services into Tanzania are down considerable since January 2015: down by roughly 35% in just over two years.

We can also look at credit to the private sector. Again, this can be a good measure of economic health: if the economy is strong, banks will be happy to lend money.

As with imports, so there has been a decline here: prior to 2016, lending to the private sector had grown at a rate of around 20% a year. This has now dropped to just 1% in the latest available figures, for July 2017.

Finally, an indicator that perhaps affects most Tanzanians lives more immediately than any of those presented above: food prices. This is a complex area, as higher prices can be good for producers just as they are bad for consumers. But price increases would suggest demand is outstripping supply. And if prices go very high, it would suggest there might be a serious food shortage.

It’s good to see that prices have come down considerably since the start of the year – when reports and evidence of food shortages were widespread, despite initial government denials. But it’s noticeable that prices are still well above where they were at this time in the season in 2015 and 2016.

I want to end with two questions:

First: Bank of Tanzania figures tell us that money supply growth is down, imports are down, credit to the private sector is sharply down, and food prices remain high. What does this tell us about the state of the Tanzanian economy?

And second: an opposition politician is arrested and charged for pointing to what he describes as significant anomalies in official data. What does this tell us about the state of Tanzanian democracy?


This post originally appeared on mtega.com.

Fact-checking the falling shilling: How is Tanzania doing compared with her neighbours?

exchange rates trends Jan-Jun 2015 v2Tanzania’s Finance Minister, Saada Mkuya, said earlier this week that there was nothing the government could do to stop the value of the shilling from sliding against the dollar. The Citizen reported her as saying that all major currencies in Africa are in freefall, thanks to the stronger dollar.

I have looked at the numbers to see whether this claim is correct. Specifically, I have looked at how five different currencies – including the Tanzanian shilling – have lost value against the US dollar since January 2015. The other four currencies are the Kenyan and Ugandan shillings, Zambian Kwacha and Mozambican Metical. Continue reading

Dar will not become a “middle income country” in 2015, but will Tanzania?

Daily News fp 120615Dar closer to don middle-income country tag soon,” said the government-owned Daily News on the front page, citing the budget speech by Tanzania’s Minister of Finance, Saada Mkuya Salim.

Let’s leave aside the oddly phrased headline (including the implication that “Dar” is about to become a country).

Instead, is Tanzania really on track to soon become a middle-income country? Continue reading

Chart #38: The best and worst of the Tanzania Human Development Report 2014

The 2014 Tanzania Human Development Report was released last week. It’s been prepared by the Economic and Social Research Foundation (ESRF), with support from the UNDP.

It should be a fascinating document – the equivalent reports in the past have often been the best national-level summary of Tanzania’s progress towards Millennium Development Goals and Mkukuta targets – see this 2009 report, for example. But this time I was disappointed. In several important areas, the report has almost nothing to say. Continue reading

Chart #36: Chinese influence in Tanzania

The increasing presence and influence of China in Africa is controversial to some. But not, it seems, to Tanzanians. New data from the latest round of Afrobarometer surveys has just been released, with some analysis (pdf) of how Tanzanians perceive Chinese influence.

I have four charts for you. First, how influential do Tanzanians think China actually is, compared to other countries / institutions?

Continue reading

How (un)equal is East Africa? And does it matter?

Does inequality matter? What are the effects of wealth being concentrated in the hands of a few individuals?

Well, if you believe some of the world’s most respected economists – people like Thomas Piketty, Joseph Stiglitz, Branco Milanovic, Wilkinson and Pickett – it matters. And they say it is getting worse. The World Bank and the IMF made “shared prosperity” the theme of their annual meeting this year, and the IMF head, Christine Lagarde, described the rise in global inequality as “staggering”. Just in the past week, Bill Gates, the Financial Times and the (UK) Guardian have all made the case that inequality matters.

At the global level, Oxfam famously found that the world’s richest 85 people own as much wealth as the poorest 3.5 billion people – half the world’s population. And The Rules put together a great video showing wealth inequalities on a global scale, itself inspired by similar work focussed on the US.

But what about inequality here in East Africa? Continue reading

Tanzania from space, by night

Political patronage can be seen from space, according to a recent academic study. And elsewhere, the light given off at night by cities shows sharp discrepancies between neighbouring countries – South and North Korea and China, for example.

So what about Tanzania?

I found two sets of maps produced by NASA (the US space agency) and loaded onto Google Maps, for 2003 and 2012. Let’s take a look at 2012 first:

Tanzania night light map 2012

Tanzania night light map 2012

Continue reading